Impact of Health on Labour Productivity: Empirical Evidence from Pakistan

Abstract

The current study attempts to examine the role of health status on workers’ productivity by employing Autoregressive Distributed Lag (ARDL) approach by Pesaran and Shin (1999) and Pesaran et al. (2001)  using data from 1980 to 2010 for Pakistan. The major concern of the study is impact of health status on productivity and estimated coefficient of health is 13.39 which is highly significant indicating that 1% increase in health status leads to increase productivity by 13.39%. The coefficient of EDU is positively related to worker productivity at 1% level of significance and indicates that workers productivity will increase by 0.18% due 1% increase in education. Inflation is affecting negatively to the workers productivity and association between workers productivity and FDI which reflects impact of technology transfer on productivity is positive but statistically insignificant which shows that technology transfer has no effect on productivity in case of Pakistan. The coefficient of life expectancy is positively related to productivity but it is statistically insignificant which depicts that life expectancy is not related to productivity in the short run.